Price increases in VHI insurance of between 15pc and 45pc are very steep -- how justified are they?

VHI argues its customers will require 10pc more healthcare this year and this needs to be paid for. They are ageing and more are developing long-term illnesses. At the same time more treatments and specialists are there to avail of.

It said that 8pc of the price increase is due because the Department of Health hiked the fees it charges VHI and other companies for private beds in public hospitals. Why?

If you have private health insurance your daily charge for a private room in a public hospital from this month will cost €1,017. Last year it was €910 and next year it will rise to €1,043.

The VHI will pick up the bill. The daily charge covers all accommodation and care, except for the consultant's fee. The department's rise will cost the VHI an extra €60m this year. The department is asking all insurance companies to pay more for private facilities in a public hospital after the recommendations of a value-for-money report.

Why should the costs in public hospitals rise -- they are funded by taxpayers?

The value-for-money report said insurers were not being charged the full economic cost. It also suggests the "all-in" daily charge should be changed because it is the same whether the patient has just a simple blood test or needs a new hip. VHI has argued the daily charges are too high and they could get a cheaper deal in some private hospitals. So the customer is caught in the middle.

How energetic has the VHI been in tackling the fees it pays private hospitals and well-paid consultants in order to control premium rises for customers?

It has cut the fees consultants get by 15pc in the last two years. It has also reduced the fees it pays to private hospitals, putting a monthly cap on the revenue it pays them. It says it has also reduced internal costs by €15m.

Will it continue to charge customers the same price for the same level of cover regardless of age or what illness they have?

It has to under the law. But another source of grievance for the VHI is the way it is subsidised by the Exchequer in order to charge costly older customers the same as young people. The subsidy it is getting for a customer over 80 years old is €1,725 but it should be €2,880, it says. These subsidies are paid out of a pool of money of around €300m, which all insurance companies contribute to. It has to pay €295 per adult customer this year, up from €205.

Will the VHI lose customers over this?

VHI still insures six out of every 10 people with private cover. But the health insurance market generally is under pressure and thousands are abandoning their policies. People should look up the Health Insurance Authority website or ring its staff at 1850 929166 for information on cheaper deals.